Online gaming firms get Rs 1-trn GST notices
GST Council serves show-cause notices to them to pay 28% indirect tax on full value of online bets
image for illustrative purpose
Tax Tangle
♦ 28% GST mandatory for overseas online gaming cos from Oct 1
♦ Online gaming firms like Dream11, and casino operators like Delta Corp received GST show-cause notices
♦ GamesKraft in Sept 2022 received tax notice for alleged GST evasion of Rs21,000 cr
♦ While Karnataka HC ruled in favour of it
♦ However, central govt in July filed SLP in Supreme Court
♦ GST Council discussed issue of retrospectively taxing online gaming
♦ Dues from some firms exceeding their turnovers
New Delhi: GST authorities have issued show-cause notices worth Rs1 lakh crore to online gaming companies for tax evasion so far, a senior official said on Wednesday. The official, however, said that there is no data yet of foreign gaming companies registering in India since October 1. The government has amended the GST law, making it mandatory for overseas online gaming companies to register in India from October 1. The GST Council had in August clarified that 28 per cent Goods and Services Tax (GST) would be levied on full value of bets placed on online gaming platforms.
“It was informed to certain members that this is not retrospective and this was the law earlier. These liabilities were already existing because money online games played with bets. They were already attracting by way of betting or gambling 28 per cent GST,” said Revenue Secretary Sanjay Malhotra, while answering a question at a press conference after the meeting. “Online gaming companies served notices worth about Rs1 lakh crore by GST authorities so far,” the official said. Many online gaming firms like Dream11, and casino operator, like Delta Corp, have received GST show-cause notices last month for alleged short payment of taxes. Separately, a show-cause notice was sent to GamesKraft in September last year for alleged GST evasion of Rs21,000 crore. While the Karnataka High Court has ruled in favour of the company, the central government in July filed a Special Leave Petition (SLP) in the Supreme Court.
Chhattisgarh Deputy Chief Minister TS Singh Deo also said that the Council discussed the issue of retrospectively taxing online gaming under the indirect tax regime with the dues being demanded from some firms exceeding their turnover.
